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| Suguna |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
| Project number | 25065 |
| Company name | Suguna Poultry Farms Ltd. |
| Country | India |
| Sector | Agriculture and Forestry |
| Environmental category | B |
| Department | Agribusiness |
| Status | Active |
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| Date SPI disclosed | July 21, 2006 |
| Projected board date | September 20, 2006 |
| Previous Events | Invested: November 8, 2006
Signed: October 3, 2006
Approved: September 27, 2006 |
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| View Environmental & Social Review Summary (ESRS), click here |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
Suguna Poultry Farms Ltd. (the company or Suguna) is one of India’s largest poultry companies. Suguna works with around 10,500 contract poultry farmers, who receive the company’s support in terms of guaranteed prices and off-take as well as hands-on technical assistance in the actual poultry rearing operations. The company’s headquarters are located in Coimbatore, Tamil Nadu.
Going forward, the company’s strategy is to expand breeder farm, hatchery and feed mill capacity. In order to achieve its growth strategy, over the next four years, the company proposes to implement an investment program and has requested IFC to provide debt and equity financing towards funding this program. The key components of this program are:
- Expansion of breeder capacity;
- Expansion of hatcheries capacity; and
- Expansion of feed-mill capacity. |
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| Project sponsor and major shareholders of project company |
| The company was established in 1982 by two brothers, Mr B. Soundararajan and Mr G.B.Sundararajan who own 99.2% shareholding of the company. |
| Total project cost and amount and nature of IFC's investment |
| The total project cost including incremental working capital is estimated at $203 million over the period FY2007-2010. The proposed IFC financing package comprises of a preference share investment and a loan of up to $30 million. |
| Location of project and description of site |
| The company’s operations are spread over five regions, which are Tamil Nadu (Head office in Udumalpet), Karnataka (Head office in Bangalore), Andhra Pradesh (Head office in Hyderabad), Maharashtra and Gujarat (Head office in Pune) and West Bengal (Head office in Kolkata). The company has recently commenced operations in Northern India with its regional Head office in Chandigarh. The proposed investments will be implemented throughout these regions. |
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| Anticipated development impact of the project |
| The project will support the continued expansion of a successful private poultry enterprise. In addition to the benefit for its financiers, the project will also have significant benefits for employment by the company and the creation of economic opportunities for thousands of rural and urban entrepreneurs who will raise chickens for the company through an outgrower contract system, and those who will distribute its product in the cities. |
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| IFC's expected development contribution |
- Long-term support for a well-run mid-tier company in its growth strategy;
- Sharing of poultry sector expertise particularly in improving efficiency and biosecurity; and
- Assisting the company strengthens its corporate governance and supply chain as it seeks to source raw material directly from farmers. |
| Environmental and social issues - Category B |
This is a Category B Project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria.
The review of this project consisted of appraising technical, environmental and social information submitted by the project Sponsor including Tamil Nadu Pollution Control Board consents for Suguna’s feed mill. |
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| For inquiries about the project, contact: |
Mr. P.K. Bhardwaj, General Manager (Finance and Accounts)
Suguna Poultry Farm Ltd.
5th Floor, Jaya Enclave
1057 Avinashi Road
Coimbatore-641018, India
Environmental documentation will be made available at the following locations:
- The Hindhu
- Dinamalar
- Corporation Bank, Industrial Finance Branch, Trichy Road, Coimbatore |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
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